Hendricks v. Franklin

4 Johns. 119

Opinion

Spencer, J.

delivered the opinion of the court. In this case, the question is, what damages the plaintiff, who is the indorsee of a foreign bill of exchange, of which the defendant is the drawer, and which was returned protested for non-acceptance and non-payment, is entitled to recover; the plaintiff contending, that he has a right to recover, as well the principal and interest, as also 20 per cent, damages, and an additional 2 per cent, as the difference of exchange, between the time of negotiating the bill, and notice of the non-payment to the defendant, by way of re-exchange. The payment of this 2 per cent, the defendant resists.

The right to recover 20 per cent, damages on the protest of a foreign bill of exchange, rests with us on immemorial commercial usage, sanctioned by a long course of judicial decisions. In Great Britain

Footnotes

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* there is no such usage, and hence, there, the difference of exchange is always taken into consideration, and their courts of justice allow for the usual rate of re-exchange upon the protest of a foreign bill. In Pennsylvania, as early as the year 1700, the legislature enacted, that if any person within that province should draw or indorse any bill of exchange upon any.person in England, or other parts of Europe, and the same be returned back unpaid, with a legal protest, the drawer and all concerned should pay the contents of the bill, together with 20 per cent, advance for the damage thereof, in the same specie as the bill was drawn, or current money of that province, equivalent to that which was first paid to the drawer or indorser. It is presumed, that our rule to allow 20 per cent, on the protest of a foreign bill, was originally coextensive with the rule thus established in Pennsylvania, and that the same reasons induced both rules. The 20 per cent, was in lieu of damages, in case of re-exchange, and because there was no course of exchange from London to New-York, and to avoid the constant uncertainty and fluctuation of exchange. If these were not the inducements to the allowance of such very heavy damages, as 20 per cent. I confess myself unable to discover them. It certainly could not be intended merely as a mulct, nor with any other view than to remunerate the party for all his damages in being disappointed in the honouring of his hill. It is not pretended, that this claim for a re-exchange, or more properly for the difference in the price of bills' at one time and another, has ever been recognised in this state, by any judicial decision. The chamber of commerce, it seems, provide, in their regulations, for this difference in the price of bills, between the time a-'"’bill has been purchased, and notice of its dishonour ; and I understand that merchants regulate themselves, by the rules of the chamber of commerce. This, however, cannot make the law; the usage is too recent, and too unsupported by judicial countenance, to produce the consequences contended for. I understand that it has ia variably been the practice of the clerk of this court, in assessing damages on protested bills, to give the principal, interest, and 20 per cent, damages, and no more. In my opinion, the 20 per cent. is in lieu of all claim for damages in such cases, and the claim for the difference in the price of the bills, cannot be supported, and, therefore, it must be deducted in this case.*

Judgment accordingly.

2 H. Bl. 373.

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Chit. 216. 2 H. Bl. 378. Amb. 674. 2 Term Rep. 52.